The state prosecutor’s office for tax and financial crimes on Tuesday informed Gal Hirsch, a former IDF general and withdrawn candidate for police commissioner, that it is considering indicting him and three others, pending a hearing, for tax crimes that allegedly took place in 2007-2009.
According to the state prosecutor, the four men — Hirsch, Oded Shachnai, Yaniv Adam and Mikhael Benimini — were partners in Defensive Shield, a company that provided defense advice and military training and brokered arms sales to Georgia, and also provided services to other countries between 2007 and 2009.
Prosecutors allege that the men collectively enriched themselves to the tune of NIS 40,000,000 (about $11.5 million) but failed to report this income to the Tax Authority.
The state prosecutor alleged that the four business partners set up a spiderweb of companies and bank accounts in Israel, Georgia, Switzerland and Guernsey which they used to receive income from Georgia’s Defense Ministry, divvy it up among themselves, and hide it from Israel’s Tax Authority.
According to the state prosecutor, “In 2007-2009 Oded Shachnai failed to report personal income of no less than NIS 19.5 million . As part of his fraudulent conduct vis a vis the tax authorities, his personal income was transferred to his personal bank accounts around the world including in Georgia, Jersey and Switzerland.”
Shachnai is also accused of deceiving bank officials at Fortis Bank in Guernsey by telling them that the money entering his bank account there did not come from arms deals, when it allegedly did.
Hirsch is accused of failing to report personal income in 2008 of NIS 6.1 million ($1.7 million). In 2009 he allegedly transferred NIS 3.3 million ($950,000) of his personal income from a secret bank account he kept in Switzerland to a company called Gal Hirsch Ltd. in Israel. Gal Hirsch Ltd. allegedly issued invoices to the foreign company that controlled the Swiss bank account. Israel’s state prosecutor charged that these invoices were fictitious.
Mikhael Benimini is accused of hiding personal income of NIS 13.6 million ($3.9 million) from the Tax Authority, and Yaniv Adam is accused of hiding NIS 3.8 million ($1.1 million).
Hirsch is a Likud politician and a favorite of Likud activists for the role of police chief.
Benimini is a close relative of Georgia’s former defense Minister Davit Kezerashvili and has recently run a binary options and cryptocurrency call center from Albania.
Yaniv Adam is the manager and father of the famous Israeli singer Omer Adam.